Housing Bill Provision will enhance biotech innovation.
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Press Release Summary:
Passed by U.S. House of Representatives by vote of 272 to 152, provision included in Housing Bill will provide companies limited investment incentive by allowing them to utilize accumulated AMT or R&D credits in lieu of bonus depreciation to which they would otherwise by entitled. Many biotech companies whose products have not yet made their way to market will be in stronger position to carry out clinical trials and product development because of this provision.
Original Press Release:
Accelerated R&D Credit In House-Passed Housing Package
Accelerated R&D Credit in House-passed Housing Package Will Enhance Biotech Innovation, Speed Therapeutic Discovery and Increase Jobs
Contact:
Contact Ellen Dadisman
202/312-9299
WASHINGTON, D.C. (Thursday, July 24, 2008) - Hundreds of biotechnology start-ups will be encouraged to utilize an incentive for capital investments as a result of a provision included in the Housing Bill passed by the U.S. House of Representatives last night by a vote of 272 - 152.
"Many biotech companies whose products have not yet made their way to market will be in a stronger position to carry out clinical trials and product development because of this provision," said Jim Greenwood, president and CEO of the Biotechnology Industry Organization. "This provision will encourage companies to make new investments this year, stimulating the economy and accelerating the development of new life-saving therapies.
"This provision will give emerging companies the opportunity to create new jobs as they make new products available, and we thank Ways and Means Chairman Rangel and House leaders for their leadership in guiding this important incentive through House passage," continued Greenwood.
Bonus depreciation was enacted into law earlier this year and is designed to encourage companies to make capital investments that will help spur economic growth. Yet many companies that do not expect to pay tax this year, in part due to the economic downturn, would receive no benefit regardless of how much they invest.
The provision passed by the House will provide these companies a limited investment incentive by allowing the companies to utilize accumulated AMT or R&D credits in lieu of the bonus depreciation to which they would otherwise be entitled. Like bonus depreciation, this provision is not a new tax benefit. It simply allows companies to use credits today that they could otherwise use in the future, based on the new capital investments that would have qualified under bonus depreciation.
This provision is supported by a broad range of industries, including: American Airlines, Arena Pharmaceuticals, Inc., the Association for Manufacturing Technology, Arch Coal, BIO, Cleveland Cliffs, CMS Energy, Coal Source, Consol Energy, Ford, Foundation Coal, GM, Goodyear, Jim Walter Resources, Murray Energy, National Mining Association, Northwest Airlines, Owens Illinois, Peabody, and Smurfit Stone.
This bipartisan proposal originally passed as the Voinovich-Stabenow Amendment on the Senate Floor (vote of 76-2) to the Senate Housing Package (cosponsors included: Senators Hatch (R-UT), Rockefeller (D-WV), Smith (R-OR), Cantwell (D-WA), Vitter (D-LA) and Levin (D-MI)).
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